Agenda item

Report of the Assistant Director, Transformation and Resources, to inform the Committee of the changes to the Off-Payroll Intermediaries legislation that came into effect in April 2017. The report considers how the changes will impact on the Council as an employer and on its current workforce strategy, which will require strategic planning to minimise the impact.

The Committee considered the report on the reform of legislation governing off-payroll in the public sector (IR35), as presented by Richard Grice, AD Transformation and Resources. The report focussed on the key risk areas for the Council; the Committee was advised that to date 13 of the Council’s 159 off-payroll workers had left the organisation, of whom six had cited IR35 as the reason for leaving. It was noted that the full impact of the legislation on the Council would not be known until five or six months had elapsed, and that a further review would be brought back to the Committee in due course.

In response to a question from the Committee regarding individuals who would be out of scope for IR35, it was confirmed as an example that someone working for the Council on a specified, strictly time-limited project or providing specialist expertise would be considered out of the scope of the IR35 legislation. With regard to the risk to the Council in respect of the requests to increase worker day rates, it was confirmed that the Council was currently negotiating with nine individuals regarding day rates, in specialist areas of expertise.

The Committee asked about the 159 off-payroll workers reported, and where within the Council these staff were based. It was reported that the majority of these were agency social workers, with consultant and interim posts making up 38 of the 159 posts.

In response to a question from the Committee, it was confirmed that the deadline for the Council to complete assessment of its off-payroll workers was the end of April 2017.

The Committee asked about the particular risk identified in respect of lawyers leaving the authority, and it was reported that because IR35 only applied to public sector bodies, there was a potentially greater impact on any areas where individuals had the option to choose to work outside of the public sector. It was noted that this had not happened as yet, but that the Council would continue to monitor these areas as they would remain a potentially higher risk.

Cllr Gideon Bull, attending the meeting as an observer, spoke at the Chair’s discretion and asked for clarification of the impact on off-payroll workers of the change in legislation. Mr Grice advised that the situation for each individual would be different, but that, for example, individuals who had previously been engaged by the Council via personal service companies would lose some benefits by moving onto the Council’s payroll, for example in relation to expenses claimable. It was confirmed that the additional costs to the Council arising from the changes largely related to the costs associated with administering payroll for individuals who had previously been off-payroll, and the accrual of staff benefits by those who had not previously been directly employed by the Council.

The Committee noted that the reform would have a significant impact on the Council’s ongoing efforts to reduce the number of consultants and interim staff employed by the Council.

RESOLVED

That the Committee note the content of the report.